By Linda Tucci
Post-Dispatch
12/11/2003
-image courtesy of builtstlouis.net
A $13 million plan to restore the Security Building took an important step forward - and so it seems did a proposed $90 million investment by the 500-pound gorilla next door, the Federal Reserve.
The city's TIF commission gave a thumbs up Wednesday to a request for $3 million in tax-increment financing from the Lawrence Group, which hopes to turn the deteriorating, 10-story landmark at 319 North Fourth Street into top-notch office space.
A $3 million TIF on a $13 project is steep, particularly in a deal where most of the equity comes from a deferred developer fee and historic tax credits. But the rather modest project, it became clear, plays an outsized role in the neighborhood.
"Had the building not been purchased by friendly people, the Federal Reserve, with its 900 jobs, would not have moved forward with its upgrade," said Deputy Mayor Barbara Geisman, on hand to advocate. The Fed plans to reconfigure, secure and provide more parking for its downtown headquarters.
A long-time tenant in the Security Building, the Lawrence Group decided to buy it from Pete Dolan rather than move. The sale is expected to close after the first of the year, said principals Steve Smith and David Ohlemeyer. Merrill Lynch will provide financing, US Bank will handle the tax credits, Alberici will do the construction.
The Security project stands on its own merits, too, Geisman told commissioners. While the city is pleased by the rush to build lofts downtown, the work force there accounts for one-third of the city's budget. "Here's a firm (Lawrence Group) that began with about a half-dozen people and now has 110 employees. And they want to attract other businesses by making this building beautiful."
Indeed, Smith mentioned a U-city advertising firm that will be moving to the Security. That said, the project comes with plenty of challenges. Getting the building to cash flow will be a challenge; remaining tenants are leasing for well below market rates, including an entire floor occupied by the personal-injury firm Cofman & Townsley for less than $8 a square foot.
The designs for the Security Building, by the way, revealed another interesting transformation: a Fed plan to replace Locust Street between Fourth and Broadway with a pedestrian plaza.
